The American Federation of Television and Radio Artists wants its recording-artist members paid directly for license fees they receive via the Internet.

Federal copyright law requires that performers share copyright license fees from Internet music. Ann Chaitovitz, AFTRA's director of sound recordings, last week urged a Congressional subcommittee to let artists's fees go directly to the performers, rather than pass through other entities, such as recording companies. Should the fees pass through middlemen, they would have the opportunity to recoup from these revenues, even if such recoupment is not permitted, Chaitovitz explained. Moreover, the performers' payments would be delayed, and it could prove impossible for the performers to ensure they receive the amount mandated by Congress without conducting "a costly, time-consuming and burdensome audit."

The House Judiciary Committee's subcommittee on courts, the Internet and intellectual property held the hearings on Internet music. Before the panel, Chaitovitz also refuted "widely held misconceptions" about the payment method and amounts for recording artists.

"Royalty artists receive a royalty for the sale or distribution of each recording and do not receive a fee for making an album...[They] must pay for all the production costs of an album, and typically pay half of independent promotional costs, 50% of the costs of videos and as much as 100% of the tour costs," she testified. "What often is not understood is that the artist does not receive any of this royalty money until the recording company has recouped these costs."

The "payback" process may take two or three years, Ms. Chaitovitz said. Recording star Sheryl Crow, for example, has stated that she did not receive any money until after her record had sold three million units, but fewer than 0.35% of all recordings sold in 1999 achieved that figure. Thus, most royalty artists never actually receive any royalties.

AFTRA's 80,000 members include 15,000 singers, 4,000 of whom are royalty artists.



The Other Side

Digital music execs also testified before the panel, calling for a copyright-law overhaul, without which online music systems won't be able to sustain themselves. Songwriters and music publishers disagreed, concerned that certain copyright changes might affect their royalties.

Robin Richards, president of online music firm MP3.com asked lawmakers to authorize a flat, per-song royalty rate like that implemented by satellite and cable music systems. Country singer Lyle Lovett disagreed, calling compulsory licenses unneeded because the American Society for Composers, Authors and Publishers (ASCAP) has granted millions of song licenses to some 2,200 websites.

This week, MP3.com announced it was being purchased in a cash and stock deal by Vivendi Universal, the parent of Universal Music Group, for $372 million. AFTRA has publicly stated its concern about the numerous mergers in the entertainment industry, believing that such meldings limit the outlets for performers, as well as creative choices for the public. But Edgar Bronfman Jr., v.p. of Vivendi Universal, last week told the Congressional copyright subcommittee that his firm would not abuse its dominant slot in the marketplace, allowing other record labels and websites to use its Internet pipes.